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What type of insurance do I need for a co-op or condo?
If you purchased a condo or co-op, the bank requires insurance to protect the investment. You may need insurance to cover your personal items, liability or fees regarding shared areas of the building, like the lobby.
You need two separate policies:
Your own insurance policy.
This provides coverage for your personal possessions, structural improvements to your apartment, and additional living expenses if you are the victim of fire, theft, or other disaster listed in your policy. You also get liability protection.
A "master policy" provided by the condo/co-op board.
This covers the common areas in your building like the roof, basement, elevator, boiler, and walkways for both liability and physical damage.
To adequately insure your apartment, it is important to know what structural parts of your home are covered by the condo/co-op association and what are not. You can do this by reading your association’s by-laws and/or proprietary lease. If you have questions, talk to your condo association, contact us or your family attorney.
Sometimes the association is responsible for insuring the individual condo or co-op units as they were originally built, including standard fixtures. The individual owner, in this case, is only responsible for alterations to the original structure of the apartment, like remodeling the kitchen or bathtub. Sometimes this includes the improvements you make and those made by previous owners.
In other situations, the condo/co-op association is responsible only for insuring the bare walls, floor, and ceiling. The owner must insure kitchen cabinets, built-in appliances, plumbing, wiring, bathroom fixtures, etc.
Ask us about the following additional coverages:
Unit assessment.
This reimburses you for your share of an assessment charged to all unit owners as a result of a covered loss. For instance, if there is a fire in the lobby, all the unit owners are charged with the cost of repairing the loss.
Water back-up.
This insures your property for damage by the back-up of sewers or drains. Water back-up may not always be included in a policy. Check to see that it is included.
Umbrella liability.
This is an inexpensive way to get more liability protection and broader coverage than what is typically included in a standard condo/co-op policy.
Flood or earthquake.
If you live in an area prone to these disasters, you will need to purchase separate flood and earthquake policies. Flood insurance is available through FEMA's National Flood Insurance Program. Both flood and earthquake insurance can be purchased through your insurance agent.
Floater or endorsement.
If you own expensive jewelry, furs, or collectibles, you might consider getting additional coverage since there is generally a $1,000 to $2,000 limit for theft of jewelry on a standard policy.
Remember to ask about available discounts. You can reduce your rates by raising your deductibles and by installing a smoke and fire alarm system that rings at an outside service. If you insure your unit with the same company that underwrites your building’s insurance policy, you might get an additional reduction in premiums.